Job losses have finally started appearing in the unemployment statistics — not a flood as some excitable commentators seemed to suggest — and they followed the classic pattern, of part timers first.
But while unemployment rose and the job losses finally appeared in the November employment data from the ABS, the figures again emphasised the continuing resilience of the Australian economy.
Despite growth slowing to just 0.1% in the September quarter, with the domestic non-farm sector doing it tough with sales weak and confidence uneven, the economy has managed to withstand the surge in jobless suggested by indicators like the ANZ Job Ads series, which has shown an accelerating loss of job ads, especially from September to November.
The ANZ job ads series saw an 8.6% fall last month, the seventh month in a row there’s been a fall, led by a record drop in newspaper notices. Business confidence slipped to a record low last month according to this week’s NAB business conditions and confidence survey.
The NAB survey however has highlighted a slump in business conditions pushing forward into the March quarter of next year which could be adverse for employment.
Economists were right on the nose with their forecasts of 15,000 to 16,000 jobs would be lost: it was 15,600, with the number of people registered as being unemployed rising 7900.
Interestingly, the pattern across the country was varied.
The rise in the national jobless rate in November reflected a jobless jump in resource-rich Western Australian to 3.0%, from 2.3%, and an increase in Tasmania to 4.5%, from 3.6%. The rate also increased in the Northern Territory to 3.8% from 3.5%.
But sluggish NSW saw an improvement: with the unemployment edging down to 5.2% from 5.3%. It also eased to to 2.5%, from 2.6% in Canberra.
The ABS said that the jobless rates were unchanged in Victoria at 4.4%, Queensland, 3.8% and South Australia 5.3%..
The ANZ said this week it was looking for a 22,000 rise in the number of jobs lost last month.
But all the losses were in part-time work, which is a good indicator that employers have started shedding the most easily cut workers first. If demand continues to slow then the pace of job losses among full time employees will pick up. That has been the pattern in the US and UK economies.
But we are a long way from being in as bad a state as the US for example where over half a million jobs were lost last month alone as the unemployment rate jumped to 6.7%. It’s 12.5% when under-employed (including workers on short time and weeks) are included. The unemployment rate in Australia edged up to 4.4% from 4.3% in October. November’s rate was the highest since November 2007.
The Roy Morgan group reckons by its measure, unemployment is 6.4%.
The ABS said full-time workers rose 8,800 in November to to 7,695,300, while part-time employment fell 24,400 to 3,054,600. Unemployment rose 7,900 to 496,600. The number of people looking for full-time work increased by 5,900 to 344,700 and the number of people looking for part-time work increased by 2,000 to 151,900.
The participation rate eased to 65.1% from 65.3%, indicating some people because discouraged in looking for work last month.
The ANZ, Westpac, Qantas, Ford, Fairfax Media, Telstra, Southern Pacific Tyres, the ABC and a string of other employees have revealed thousands of job cuts in recent months, but most of these seem to have been absorbed.
Rio Tinto revealed the largest so far: 14,000 yesterday, but those won’t just be in Australia but spread across the company’s businesses globally. Rio though will cut workers here and will close its Australian mines for two weeks over Christmas
Westpac chairman, Ted Evans told the bank’s AGM in Sydney this morning that “The year ahead will remain challenging for the economies in which we operate and for our customers. The world will be, effectively, in recession.”
“We expect our balance sheet growth will slow and our impairment charges will grow as the economy slows. The impact of the softer economic environment will not be felt evenly by our customers and, as such, we will need to be proactive in helping those customers that find themselves in distress.”
The bank’s CEO, Gail Kelly said that that jobs would be lost as her bank absorbed St George.
But according to the bank’s economic team, while the economy will slow next year, the economy will remain out of recession. In contrast the NAB said this week that saw the economy dipping into negative territory next year in possibly three of the fourth quarter and that the recession though would be “mild”.
The slump in Chinese exports in November isn’t the sort of news that Australian resource exporters (or those in Canada, Brazil or India) would have wanted to hear.
But losses will now continue, but the home loan approval figures for October, and an expected surge in first home buyer deals in November and this month, will help offset some of these losses. the point with the home loans to watch for is the impact on new home starts.